A World Afloat on an Ocean of Oil

Considering how much untapped oil is known to exist, not just in the United States, but worldwide, one would think that its current price was some kind of anomaly and it is. It is more the result of speculation than anything else.

The most fundamental fact about oil worldwide is that there is lots of it. Though frequently overlooked, the ability to refine crude oil plays an essential role in the supply and demand equation. More refining capacity is needed worldwide. Finally, there's the fact that, in general, oil is very expensive to get at and often found in the most inhospitable places on Earth.

For sheer insanity, however, consider a nation that has an estimated 31 billion barrels of oil offshore of its coasts and 117 billion barrels of oil under land owned or managed by the government, plus 139 billion barrels beneath privately held land.

In just one area, a desolate place designated a wildlife refuge, there's an estimated 7.7 billion barrels untapped. The nation with this abundance of oil is, of course, the United States of America. Most of the areas where oil is known to exist have been ruled off-limits to any exploration or extraction by the government.

In the areas where it is accessible, drilling for it is hugely encumbered and often denied by the National Environmental Policy Act, the Clean Water Act, the Endangered Species Act, and the National Historic Preservation Act.

If, however, you connect the dots, you will have noticed by now that America's energy problems, namely the price of a gallon of gasoline or heating oil, is making everyone miserable thanks in great part to environmental legislation designed to make it impossible to access oil on both public and privately held lands.

Then, just to make matters worse, the government requires that every gallon of gasoline include the additive, ethanol, which reduces its mileage and increases its cost.

Further, we're told that Sen. Barack Obama, if elected, intends to seize "windfall profits." This is sufficient reason for American oil companies to decide to drill anywhere else. The last time a windfall profits tax was implemented was at the end of President Carter's term. It had such a negative impact on U.S. oil companies that drilling for oil domestically dropped dramatically. It has stayed that way since the 1980s. Their actual profits are now less than pharmaceutical, high tech, and other elements of the economy. Imagine how thrilled they were to hear Rep. Maxine Waters' threat to nationalize them.